Volume 194 | July 19, 2024

Guardian Asset Management

Weekly Newsletter

Guardian endeavors to provide you with the latest in housing, industry and market news from Washington D.C. and around the country. It is our goal as your industry partner to be informative, relative and topical.

The pandemic changed foreclosure prevention.

What's next?

Performance improvements from temporary pandemic-era foreclosure-prevention innovations have spurred new long-term servicing policies with some benefits for the mortgage market, but more could be done to build on that, according to experts at a recent Urban Institute event.

Further efficiencies that could aid servicers were among ideas floated.

Housing finance companies are still looking for more ways to avoid delays in processing distressed mortgages that continue to affect their costs, said David Sheeler, president of residential servicing and vice president of correspondent lending at Freedom. 

"This goes largely unnoticed in the general population, but when a customer goes delinquent, it's actually the servicer that's paying," he said.

One way to address these concerns is to get loans back to paying status as quickly as possible.

Moderator Michael Neal, a senior fellow at the institute, raised the question of whether mortgage reserve accounts could supplement existing programs in constructive ways that would improve borrower performance.

HUD floats permanent distressed-note sales program

The Department of Housing and Urban Development on Wednesday proposed to instate a permanent distressed mortgage sales program for seriously delinquent, Federal Housing Administration-insured loans.

The new program would include an expansion of guardrails aimed at addressing past concerns around the disposition and servicing of those mortgages in line with Biden administration goals.

The proposed reforms include measures aimed at giving owner occupants or organizations that advocate for them a first look at the notes when they go up for sale.

"This proposed rule will help struggling homeowners, stabilize neighborhoods, and make more affordable homes available for the people we serve," HUD acting Secretary Adrianne Todman said in a press release.

These types of sales have been in "test" or "demonstration" mode since 2002, according to HUD. Most recent distressed note sales have involved reverse mortgages for which a "first look" program has been active. 

Questions posed for comment in the proposal include whether that first look program should be extended to all mortgages.

Housing Market Takes 'Ugly' Turn

in Sign for Future: Expert

Declining prices in certain housing markets portends a declining reality for homeowners looking to sell, according to a real estate expert, amid a fall in mortgage rates that could help buyers come back to a market that has been unaffordable for many Americans.

In parts of the Sun Belt, which experienced a boom in housing demand because of migration from other parts of the country during the COVID-19 pandemic, the housing market is seeing "skyrocketing inventory" along with "skyrocketing price cuts," according to Reventure CEO Nick Gerli.

"So that means more supply on the market and of that supply, more of it is seeing list price reductions," he told Newsweek. "Perhaps there was a bit of stubbornness at first, one to two years ago, but now many of these sellers are kind of capitulating and reducing the price, especially in Colorado, Arizona, Texas, Florida, Tennessee, price cut rates above 30 percent in those states. The sellers in the market like Denver, and they're listing right now, I mean it's getting ugly."

Freddie Mac Reminds Homeowners of Mortgage Relief Options Amid Hurricane and Wildfire Season

Freddie Mac today is reminding homeowners and mortgage servicers of its immediate relief options as hurricane season and wildfire season ramp up, including for those currently affected by Hurricane Beryl and the California wildfires. Freddie Mac’s forbearance program provides homeowners mortgage relief for up to 12 months without incurring late fees or penalties.

“Freddie Mac and its partners stand ready to provide immediate assistance to those impacted by disasters like Hurricane Beryl and the California wildfires,” said Mike Reynolds, Freddie Mac Single-Family Vice President and Head of Servicing. “Our immediate mortgage relief options are available to help support recovery once homeowners and their families are out of harm’s way. Recent natural disasters such as Beryl serve as a reminder that hurricane season is upon us, and we encourage homeowners and others to prepare now.”

Freddie Mac's disaster relief options are available to homeowners who have been impacted by an eligible disaster. This includes anytime the homeowner’s property experiences an insurable loss, and also covers instances where their homes or places of employment are located in Presidentially-Declared Major Disaster Areas with individual assistance designations. Foreclosure and other legal proceedings are also suspended while homeowners are on a forbearance plan.

Politics And Home Prices: Your Location Matters

According to Redfin, your states overall political stance may determine how much you pay for a home—swing states were noticeably perceptible to this fact as median housing payments have doubled to $2,161 per month in these states since the last election. 

The sharp rise is attributed to soaring home prices and climbing mortgage rates, with the median home-sale price in swing states jumping nearly 40% to $316,063 in 2024. Concurrently, the average mortgage rate has spiked to 6.89% according to Freddie Mac, more than double the record low seen at the start of 2021. 

Redfin’s comprehensive analysis spans from 2016 to 2024 and underscores the impact on affordability across different states. In red states, median housing payments rose 95% to a record $2,066, while in blue states, payments increased 83% to $3,311—the highest among all categories. 

“These findings underscore a troubling trend in housing affordability, especially in states that will play a pivotal role in deciding the next president,” said Redfin Senior Economist Elijah de la Campa. Swing states identified in the report include Arizona, Nevada, Wisconsin, Michigan, Pennsylvania, Georgia, and North Carolina. 

The strain on affordability is evident across demographics, with households now spending a significant portion of their incomes on housing costs. For instance, a median-earning family in swing states would need to allocate 32.8% of their income to afford the median-priced home, up from 21.8% in 2020. Similar trends are observed in both red and blue states, where housing costs have outpaced income growth. 

What is the monthly payment on a $600,000 mortgage?

If you’re shopping for a new home and leaning toward houses that cost over $600,000, you may wonder if you can afford a $600,000 mortgage.

We’ll break down how much a $600,000 mortgage will cost you monthly and over the life of the loan. We’ll also share advice from mortgage experts on how to know whether a $600,000 mortgage is right for your financial situation and goals. That way, you can feel good about your housing debt on closing day and for years to come.